![EFFECT worksheet function for Excel](https://www.exceleffects.com/lib/wp-content/uploads/2022/05/effect_function_hero.png)
The EFFECT worksheet function for Excel returns the effective annual interest rate.
EFFECT worksheet function
Below is the syntax of the EFFECT function.
Syntax
=EFFECT(Nominal_rate, Npery)
Arguments
Here are the arguments of the EFFECT function.
Argument | Description |
---|---|
Nominal_rate | The nominal interest rate. |
Npery | The number of compounding periods per year. |
Examples
Example 1
![Function arguments for the EFFECT function](https://www.exceleffects.com/lib/wp-content/uploads/2022/05/effect_function_1.png)
Note: For one-year, there are 12 months. Therefore, we entered 12 for Npery.
Note: In Excel, =EFFECT(10%,12)*100% is the way you would enter the formula directly. Notice that we multiply the results of the EFFECT function by 100%. Although not necessary, it makes the result look better.